DuPont has developed a new pipe that uses Alathon24 - a polyethylene resin, which makes pipes more flexible and, therefore, less susceptible to breaking. Dupont's Alathon24 pipe will compete with existing pipe products that are competitively priced at approximately $6.50 per 100 feet.

Farmers use pipes for below-ground irrigation.If a pipe breaks before the harvest, in March, April or May, the crop damage cost is typically $40.In other months, the crop damage is negligible. Whenever a section of pipe breaks, the typical labor cost for replacing the pipe is $60. While the annual rate of failure for existing pipes is 8%, lab tests show the yearly failure rate of the Alathon24 to be 2%.

1.Compute the economic value of the new Alathon24 pipes per 100 ft to farmers for one year.(20 points)